Lawmakers Encourage CFPB to Protect Consumer Choice While Rewriting Rule 1033

The chairman and vice chairman of the House Financial Services Committee are encouraging the Consumer Financial Protection Bureau (CFPB) to protect consumer choice and financial data privacy as it writes new rules for open banking.

Reps. French Hill of Arkansas and Bill Huizenga of Michigan, the committee’s chairman and vice chairman, respectively, wrote a comment letter to the CFPB as part of the agency’s advanced notice of proposed rulemaking regarding consumer personal financial data rights under Section 1033 of the Dodd-Frank Act, according to a press release issued by the committee on Friday (Nov. 21).

“As the CFPB continues the rulemaking process under DFA 1033, the CFPB should do so in a manner that preserves the ability of consumers to authorize a wide range of third parties, both with and without fiduciary duties, to access and use such consumers’ financial data for the provision of beneficial and innovative financial products and services,” the representatives wrote in their letter dated Nov. 14. “We are in the era of consumer financial data portability, and we do not want to see an upending of the existing ecosystem to the detriment of consumers and innovation.”

Hill and Huizenga said that as the CFPB writes the new rules, the bureau should adopt the Gramm-Leach-Bliley Act consumer financial data privacy and security standards that already apply to entities that would be affected by the DFA 1033 rulemaking.

“This would preserve CFPB resources, prevent unnecessary costs for covered entities from duplicative requirements, and create a standard for all covered entities to give consumers the consistent protections that they expect,” the representatives wrote.

The CFPB released its advanced notice of proposed rulemaking on Aug. 22, saying it was seeking comments and data to inform its consideration of issues related to the implementation of section 1033.

The agency told a judge in July that it would do so and that this action may eliminate the need for the court to consider the current rule. The CFPB said this amid a legal battle in which plaintiffs were challenging the open banking rule implemented last year by the bureau’s previous leadership under the President Joe Biden administration.